Labour leader Jeremy Corbyn has outlined his plans for keeping the UK in a customs union with the European Union.

The plan would see the UK continue to sign-up to the import and export trade taxes agreed by all 27 European Union members (and some non-members, including Turkey) after Brexit.

The benefit of being a customs union member is that UK businesses would be able to continue to trade with the EU – the largest trading bloc in the world – without having to pay any charges (and vice-versa).

The drawback is it would make it much harder, if not impossible, for the UK to conduct its own trade deals after the divorce from Brussels.

What did Jeremy Corbyn say?

Labour leader Jeremy Corbyn says he will only sign-up to a customs union if the UK can have 'a say' over future trade deals

Speaking in Coventry on Monday, a city which voted by 56 per cent to Leave, Mr Corbyn said: “We have long argued that a customs union is a viable option for the final deal.

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Being part of a customs union would mean no extra charges on UK goods being sold into the EU. Grimsby’s seafood processing industry has been lobbying for a post-Brexit EU trading relationship which is free from charges and customs checks.

Are there any issues with being in a customs union?

Customs union membership could prevent Labour from intervening to protect such industries such as North Lincolnshire's steel trade (Image: Steve Morgan)

The issue is twofold. Firstly, the EU bans members of its customs union from negotiating their own international trade deals.

If the rules were the same in "a" customs union between the UK and EU, then ministers would not be able to negotiate free trade deals with the likes of the USA or China as they wouldn’t be allowed to change the import or export tariffs placed on those “third” countries outside the bloc.

But Mr Corbyn said he would only sign-up to a customs union deal if the UK has “a say” in negotiating future trade deals.

“We are also clear that the option of a new UK customs union with the EU would need to ensure the UK has a say in future trade deals,” he said.

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“A new customs arrangement would depend on Britain being able to negotiate agreement of new trade deals in our national interest.”

The second issue is that Labour said in their election manifesto that they want to protect struggling UK industries through state intervention.

But state aid and blocking cheap imports through higher taxes – in order to protect industries such as North Lincolnshire’s steel trade – are against custom union rules.

The party leader said he would want to negotiate “exemptions” from EU rules to bring in the defensive measures.

Does being part of a customs union mean accepting EU migrants?

Prime Minister Theresa May has ruled out remaining in a customs union with the EU (Image: Kirsty Wigglesworth - WPA Pool /Getty Images)

No – a customs union deals with tariffs (export and import taxes). It is the single market which allows free movement of workers and goods.

Mr Corbyn said Labour would “negotiate a new and strong relationship with the single market” in order to protect workers’ rights but stopped short of signing-up Labour to free movement.

Why is Mr Corbyn saying this now?

The left-wing stalwart has been shy about discussing Brexit, mainly because a large chunk of Labour voters – including those in North East Lincolnshire – are leave supporters. But with a major vote on the customs union due soon in Parliament, Mr Corbyn’s announcement has put the Government on notice that it could be facing an embarrassing loss if enough Tory rebels back staying in a customs bloc.

Labour is now likely to vote for a Tory amendment to the Taxations (Cross-Border Trade) Bill – formerly known as the Customs Bill – which would keep the UK in a customs union after Brexit.